Fundamentally, the public cloud refers to a service where you buy computing, storage and network power on demand from a larger shared infrastructure pool, using a "pay for what you use" model and being able to scale usage up and down.

However, CSC chief technology officer Bob Hayward says it's important to realise that Australia has some unique challenges when it comes to cloud computing. For starters, most of the large public cloud-computing companies — Amazon, Microsoft, Salesforce.com, Google and so on — do not host any of their datacentres in Australia.

Couple this with the fact that many large Australian organisations in the financial services and public sectors have not only regulatory requirements but also a strong desire to host their data in the Australian legal jurisdiction, and you start to see that the normal types of cloud-computing services don't make sense for many large organisations in Australia.

It's a factor that Qantas' Chris Seller highlights as well when asked about the issue. The executive is the airline's chief IT architect and head of operations for its Corporate Services and Technology arm.

"The market for domestic public cloud offerings in Australia is still developing," he says. "Many of the larger and more useful offerings are based offshore and this introduces data security and network latency concerns."

However, there is still demand for cloud-computing services in general from Australian customers. CSC's Hayward says that Australian organisations are still looking for many of the same benefits that true cloud-computing providers can offer, such as the ability to transfer the capital expenditure for buying computing infrastructure into operational infrastructure for renting it, or the ability to quickly ratchet up the amount of resources certain applications need for high-demand periods without needing to purchase additional hardware to do so.

The demand has stimulated solutions providers in Australia (including traditional IT companies as well as telcos like Telstra and Optus) to start offering services that offer many of the benefits of public cloud-computing services, but specifically to a much smaller audience. These forays can be seen as a first step towards eventual large-scale public cloud deployments in the long term.

Gartner research vice president Brian Prentice says the difference between public cloud and private cloud relates specifically to the audience using the infrastructure. "Private cloud is essentially cloud with a limited audience," he says. "From a private cloud perspective, the data is located internally."

A number of industry players we spoke to disagreed with this notion, saying that any form of cloud computing by definition needed to be multi-tenanted (where multiple customers were using the same infrastructure stack). However, CSC's Hayward points out that many who say this means there is no such thing as private cloud don't realise how big some of Australia's top companies and governments' computing needs are.

Hayward gives the example of a government private cloud, which could be used by multiple agencies. Or a bank's private cloud, which could be used by multiple internal divisions.

"Some of their private clouds can be bigger than public clouds," he says. And indeed, a spokesperson for the Federal Government's peak IT decision-making body, the Australian Government Information Management Office, says the group is currently in the latter stages of developing its cloud computing policy. The Commonwealth Bank of Australia, which with an annual IT spend of more than $1 billion is one of Australia's largest IT buyers, is also pushing hard towards cloud computing.

And with regulators like the Australian Prudential Regulatory Authority believed to be concerned about financial data being hosted offshore, that could likely mean private cloud services, especially until larger public cloud providers bring solutions on-shore.

Qantas' Seller says until there is a greater local presence from some of the major public cloud service providers, many Australian organisations will look towards private cloud solutions in partnership with local IT service providers as "a first step into the cloud".

The leader of the CSIRO's Computational and Simulation Science branch, John Taylor, also emphasises this definition of the private cloud when asked about the matter. He defines private cloud as "Computing infrastructure owned by CSIRO", but notes that it may be managed in "a more dynamic and flexible manner as in external clouds". And he notes the large public cloud providers haven't done enough yet to build local infrastructure.

In this context, Gartner even has more discrete definitions of certain types of private cloud. Prentice says that a "managed private cloud" is a private cloud where an end user doesn't have to deal with all of the infrastructure or the software itself in its own datacentres, but gets an IT services provider to do that.

A "virtual private cloud" is something different again. For example, Amazon might provide a dedicated portion of its Web Services infrastructure devoted to a specific customer. "The idea here is that it's a public cloud system, but the delimitation of the membership is between organisations," says Prentice.

The bottom-up approach

When you put the above factors together, you have what can broadly be described as the "top-down" approach to defining private cloud computing in the Australian context. In short, Australian organisations want many of the benefits that the public cloud offers, without the potential security risks and especially with a bit more control over where data is hosted.

But there's another way that Australian technologists are defining private cloud computing — from the bottom up.

A number of companies pointed out that the concept of private cloud was in many ways just an evolution of the sorts of virtualised environments that many Australian organisations have already been using in their datacentres.

"A lot of customers recognise that private cloud is really just datacentre automation," says Paul Allen, the head of Unisys' Asia-Pacific datacentre transformation division. "Private cloud refers to automation of a customer's environment behind their firewalls."

Qantas' Seller agrees. "Private cloud services are an evolution of the datacentre virtualisation technology developments that have occurred over the past five years," he says, noting the enhanced technologies offers higher levels of security and reliability and customisation for critical business systems using private networks."

A lot of customers recognise that private cloud is really just datacentre automation. Private cloud refers to automation of a customer's environment behind their firewalls.

Paul Allen, Unisys practice director, datacentre transformation

"These environments deliver some of the benefits of public cloud computing without the potential risks, capitalising on data security, reliability and corporate oversight concerns."

This more "organic" definition of private cloud services is one that hardware and software vendors tend to favour. Quite a few vendors refer to it as "infrastructure as a service" or "IT as a service".

HP executive Paul Schroeter, who works in strategic marketing for the company's Software & Solutions division for its Asia-Pacific and Japan area, says one of the critical parts of that evolution is the realisation that in the past, when an IT department provided infrastructure to its organisation, it was usually building the services to order — for example, provisioning servers.

The difference now is that many of these services can be configured to order instead of physically built, he says. Organisations can have their infrastructure in place, with resources being provisioned for each specific task rather than actually being built.

These are the kinds of "self-service" aspects that the IT services giants are starting to emphasise in how they talk about cloud computing. CSC's Hayward says users should have access to some form of service catalogue portal from which services can be provisioned. Without this kind of automation, a cloud is not a cloud — it's just a datacentre.

"Private clouds build on server virtualisation with the addition of automation and other attributes that make the IT infrastructure more flexible and nimble," Red Hat Australia added in a statement. "A private cloud is therefore not just virtualisation; it takes virtualisation as a logical on-ramp and evolves it." And all players agree that even private cloud services need to be easily "extensible" so that compute power can be ratcheted up and down quickly.

Ultimately, Unisys' Allen advises customers to look behind the definition of private cloud from the bottom up that individual vendors are telling them. Too many vendors, he says, are talking to customers about specific "tool-sets" rather than taking the top-down approach and looking at how the bigger picture works. "Nearly all the time, it's tool-sets, tool-sets, tool-sets. And that's the last piece of the puzzle," he says. "It's not about throwing everything out, and having to buy a new tool-set."

Allen compares the current rush to private cloud-computing solutions as being similar to the "e-business" push in the late 1990s. "Everyone just stuck an 'e' in front of something," he says. "If there's a buck to be made, people will stick an e in front of everything they are selling. There are people who are purporting to be selling cloud, but they actually aren't."

But, to a certain extent, the hype around cloud is justified, agrees InTACT's Paul Ayers. "Certainly the promise is there. We will realise some of the hype," he says, although he adds that "it is not going to save the world's problems".